Sorry Gurudev

Practice Question 1 solution:

Given:

Peak season:
Cash Rs 30,000
Inventory = Rs 120,000
Accounts receivable = Rs 60,000
accounts payable = Rs 60,000

Slow winter:

Cash = Rs 8,000
Inventory Rs 50,000
Accounts receivable = Rs 30,000
Accounts payable = Rs 30,000
Working capital at peak =?
Working capital at slow winter?

Calculation of working Capital at slow winter period

Working capital = Current assets - Liabilities

= (Cash + Inventory + Accounts receivable) - Accounts payable

= (8,000 + 50,000 + 30,000) - 30,000

= Rs 58,000

Calculation of working capital at peak period

Working capital = Current assets - Liabilities

= (Cash + Inventory + Accounts receivable) - Accounts payable

= (30,000 + 120,000 + 60,000) - 60,000

= Rs 150,000

Practice Question 2 solution: